- Ethiopian authorities have announced to lift a ban on importation of cement, which has been in place since February this year.
The ban was placed to protect local cement industries, and the decision was reversed to tackle the increase hikes in cement price in the country. During the past few weeks, the price of 100kg bag of cement rose from US $30 to US $40, resulting to the suspension of booming construction projects in the capital Addis Ababa. The factory price stood at US $17.
Worried by the negative impact of the trend on the booming construction industry, the Ethiopian Ministry of Trade and Industry said private companies would be allowed to import cement into the country through franco valuta. And as of next week, private companies would import cement without paying duty.
Ethiopia's booming construction across the country has placed a huge demand on cement, with the government putting the annual figure at more than three million tonnes. This figure is far below the combined annual production of Ethiopia's three cement factories, Mugher, Messebo and National Cement of 1.7 million tonnes annyally.
The government announced plans to increase the total annual production by 300% [4.7 million tonnes]. The state-owned Mugher cement factory aims to expland its current annual output of 900,000 tonnes to 1,1170,000 tonnes. National Cement also plans to expand its capacity from 250,000 to 600,000 tonnes.
In 2006, the Addis Ababa government granted permission to local companies to import cement on duty free in order to meet their demands. Until the ban was reinforced, an estimated total of 965,351 tonnes of cement were imported by private companies. The latest ban was put in force after the government accused the importing private companies of sourcing foreign exchange from the black market.
The Ethiopian government aims to increase its target at the end of the year, with Gima Biru, the Minster of Trade and Industry estimating a projected annual production of 9.1 million tonnes.
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